FHA loans are now Eligible for Obama Administration Loan Modifications

by R. MAK. on July 31, 2009 · 0 comments

in Mortgage,Mortgage News,Mortgage Refinance

It has been announced by the U.S. Department of Housing and Urban Development Secretary Shaun Donovan that the Federal Housing Administration (FHA) loans will be eligible for Making Home Affordable Modification program.

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Recently the refinancing portion of the Obama program has been rearranged so that it could help more homeowners to refinance even if they owe more than their homes are worth.

It will now be possible for qualified FHA-insured borrowers to modify their loans to a permanently reduced monthly payment by using a partial claim, by which the repayment of mortgage principal will be delayed through an interest-free subordinate mortgage that is not due unless the first mortgage is completely paid off.

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The program will help the borrower to bring themselves up-to-date on their loan payments, with it the borrowers may also buy down the loan by up to 30% of the unpaid mortgage balance and would be able to defer these amounts in a partial claim.

In order to determine that whether they qualify for the FHA, FHA-insured loan customers can call  888/297-865 -Home Affordable Modification Program.

Before that the borrowers sign on, they must be sure that they have understood well that this “partial claim” will required to be repaid when they sell the home or refinance the mortgage or pay off the first mortgage. This might be considered as a good solution to current financial problems but in future years it could be a problem, especially if the home value does not rise significantly.

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